The Guardian - 29.09.2012, Literatura, Gazety, Magazyny
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Katie
The foodie
Price
On life with
Harvey, her
disabled son
Interview by
Amelia Gentleman
Weekend
backlash
Has the obsession with
what we eat gone too far?
Review
n
PLUS
Golf
Exciting
fi rst day at the
Ryder Cup
Sport
n
£2.10
Saturday 29.09.12
Published
in London and
Manchester
guardian.co.uk
Huge rise in
joblessness for
women over 50
Real-life stories
The truth about
aff airs between
pupils and teachers
Page 40
Eight-day search ends
Girl who fl ed with teacher found safe
Middle-aged women face 31% increase,
compared with 4% for nation as a whole
Rupert Everett
Scandalously
gossipy, fabulously
indiscreet
Weekend
above the age of 50 has barely changed
since 2010 despite the overall increase
and budget cuts.
As well as suffering from increased
unemployment and changes to pension
provisions, the over-50s are also dealing
with the increasing life expectancy of
their parents.
In an attempt to help, the Labour party
is to announce a social care information
service for what it describes as a “true
squeezed middle” as part of the launch of a
special older woman’s commission today.
Harriet Harman, deputy leader of the party
and a long-term advocate on women’s
issues, will chair the commission.
Cooper, who has responsibility for
women and equalities as part of her Home
O
ce brief, said: “This is really a fi rst step
for women who don’t even know where
to go for help. They may have a mum in
Bolton who increasingly needs help and
support and they may live somewhere
else and have no idea what to do. Whether
it’s the council, a voluntary organisation
or just a neighbour, this information serv-
ice will help.”
The scheme is similar to the family
information service piloted by the party
in the early 1990s to publish information
on childcare providers.
David Cameron has come under fi re for
policies that make it harder for women to
work and also for behaviour (criticising his
rival Ed Miliband for not being “butch”
enough or telling a female MP to “calm
down dear” among them) that appears to
patronise them. In an eff ort to stem fall-
ing support among women in the polls, he
appointed an adviser on women’s issues
last year, but in the latest reshu
e he failed
to increase their overall number attending
the cabinet above the previous fi ve.
An opinion poll for the Hu
ngton Post
this week suggested that Labour is ahead
Jane Martinson
Women over 50 are bearing the brunt of
the government’s economic policies while
often trying to cope with the increasing
burden of caring for relatives, according to
research carried out by the Labour party.
Since the coalition came to power in
May 2010, unemployment among women
aged 50-64 has seen a huge 31% increase
to 142,000, compared with an overall
increase in all unemployed people over
16 of 4.2% to 2.6m, according to O
ce for
National Statistics fi gures.
In an interview with the Guardian on
women’s issues before today’s party con-
ference, Yvette Cooper, the shadow home
secretary, said the generation of women
who fought for equal pay, improvements
sipy, fabulously
screet
kend
Charlie Brooker
What happened
to me when
I went
to Japan
Travel
Labour in Manchester
≥
Miliband is thinking big, but
can he really deliver on policy?
Patrick Wintour
looks ahead
to party conference
Pages 12-13
in childcare and maternity leave were
being caught in a bind between caring
for elderly parents and grandchildren at
the same time as suff ering from outdated
workplace practices. “A toxic combination
of sexism and ageism is causing problems
for this generation,” she said.
Women as a whole have lost more jobs
than men since 2010 (an estimated 11%
increase) but women over 50 in particu-
lar have been hit hardest by the big cuts
in local authority budgets.
The number of long-term unemployed
(those out of work for 12 months or more)
has increased by 105,000 to 904,000 since
May 2010 and women make up 82,000 of
the rise, or 78%, although men are still a
majority of the unemployed overall. In
contrast, unemployment among men
Agatha Christie
An unpublished
essay: why I
hate Poirot
Review
3
≥
Megan Stammers, the 15-year-old schoolgirl who ran away with her maths teacher,
was found in France yesterday
Photograph: Enterprise news and pictures
Continued on page 2 ≥
Greek police send crime victims to neo-Nazi ‘protectors’
the police following an incident involving
Albanian immigrants in their downtown
apartment block.
“They immediately said if it’s an issue
with immigrants go to Golden Dawn,”
said the 38-year-old, who fearing for her
job and safety, spoke only on condition of
anonymity. “We don’t condone Golden
Dawn but there is an acute social problem
that has come with the breakdown of feel-
ing of security among lower and middle
class people in the urban centre,” she told
the Guardian. “If the police and o
cial
mechanism can’t deliver and there is no
recourse to justice, then you have to turn
to other maverick solutions.”
Other Greeks with similar experiences
said the far-rightists, catapulted into
parliament on a ticket of tackling “immi-
grant scum” were simply doing the job
of a defunct state that had left a grow-
ing number feeling overwhelmed by a
“sense of powerlessness”. “Nature hates
vacuums and Golden Dawn is just fi lling
a vacuum that no other party is address-
ing,” one woman lamented. “It gives ‘little
people’ a sense that they can survive, that
they are safe in their own homes.”
Far from being tamed, parliamentary
legitimacy appears only to have embold-
ened the extremists. In recent weeks
racially-motivated attacks have prolifer-
ated. Immigrants have spoken of their fear
of roaming the streets at night following
a spate of attacks by black-clad men on
motorbikes. Street vendors from Africa
and Asia have also been targeted.
“For a lot of people in poorer neighbour-
hoods we are liberators,” crowed Yiannis
Lagos, one of 18 MPs from the “popular
nationalist movement” to enter the 300-
seat house in June. “The state does noth-
ing,” he told a TV chat show, adding that
Golden Dawn was the only party that was
helping Greeks, hit by record levels of pov-
erty and unemployment, on the ground.
Helena Smith
Athens
Greece’s far-right Golden Dawn party
is increasingly assuming the role of law
enforcement o
cers on the streets of the
bankrupt country, with mounting evi-
dence that Athenians are being openly
directed by police to seek help from the
neo-Nazi group, analysts, activists and
lawyers say.
In return, a growing number of Greek
crime victims have come to see the party,
whose symbol bears an uncanny resem-
blance to the swastika, as a “protector”.
One victim of crime, an eloquent US-
trained civil servant, told the Guardian
of her family’s shock at being referred to
the party when her mother recently called
The symbol of
Golden Dawn.
The far-right
party made large
gains in the 2012
elections and has
18 MPs
Continued on page 2 ≥
2
*
The Guardian | Saturday 29 September 2012
The Guardian
Kings Place, 90 York Way, London N1 9GU.
Telephone: 020 3353 2000
Fax: 020 7837 2114
Fears of new Ulster sniper campaign
after dissident group steals 30 rifl es
Police tell crime
victims to seek
neo-Nazis’ aid
The strategy, however, appears to be
paying off. On the back of widespread
anger over biting austerity measures that
have also hit the poorest hardest, the
popularity of the far-rightists has grown
dramatically with polls indicating a surge
in support for the party.
One survey last week showed a near
doubling in the number of people voicing
“positive opinions” about Golden Dawn,
up from 12% in May to 22%. The popularity
of Nikos Michaloliakos, the party’s rabble-
rousing leader had shot up by 8 points,
much more than any other party leader.
Seated in her o
ce beneath the Acrop-
olis, Anna Diamantopoulou, a former EU
commissioner, shakes her head in disbe-
lief. Despair, she says, has brought Greece
to a dangerous place.
“I never imagined that something like
Golden Dawn would happen here, that
Greeks could vote for such people,” she
sighed. “This policy they have of giving
food only to the Greeks and blood only to
the Greeks. The whole package is terrify-
ing. This is a party based on hate of ‘the
other’. Now ‘the other’ is immigrants, but
who will ‘the other’ be tomorrow?”
were found in north Dublin a fortnight ago
during a “tailing” operation directed at
associates of Alan Ryan who have vowed
to take revenge against the Dublin crime
gang behind his murder.
However, it is not expected that the
long-range rifles would be used in the
continuing feud between republican dissi-
dents in Dublin and one of the city’s most
notorious group of gangsters.
One man was arrested in connection
with the robbery of the rifl es and released
after questioning. A fi le is being prepared
for the Republic’s Director of Public
Prosecutions.
Police believe the gang who broke into
the shop at the Coolawinna Business Park
used an electronic jamming device to dis-
able an alarm signal from the shed used to
house the business.
Gun dealers throughout the Irish
Republic are being contacted to ensure
that their premises are secure.
However, most gun dealers use con-
ventional “dual-com” alarm systems
which use landline telephone and GSM
back-up phone signals. The robbers of
the Wicklow gun dealer cut the phone
line and jammed the GSM signal with the
electronic blocker.
In the past organisations such as the
Real IRA have tried to smuggle in such
high-powered rifl es from dealers in east-
ern Europe but their last attempt to buy
weapons in Lithuania was thwarted and
two men were arrested following a “sting”
operation involving the British secret
security services.
It is believed the dissidents have now
opted for the “safer” option of stealing
the high-powered hunting rifl es, which
are almost compatible with military rifl es,
from the legitimate Irish dealers.
← continued from page 1
Irish weapon shop raided
by self-styled IRA gang
Desperate bid to stop guns
being smuggled north
Through an expansive social outreach
programme, which also includes provid-
ing services to the elderly in crime-ridden
areas, the group regularly distributes food
and clothes parcels to the needy.
But the hand-outs come at a price: alle-
giance to Golden Dawn. “A friend who was
being seriously harassed by her husband
and was referred to the party by the police
very soon found herself giving it clothes
and food in return,” said a Greek teacher,
who, citing the worsening environment
enveloping the country, again spoke only
on condition of anonymity.
“She’s a liberal and certainly no racist
and is disgusted by what she has had to
do.”
Henry McDonald
Ireland correspondent
Anti-ceasefi re republicans have stolen up
to 30 high-powered rifl es with telescopic
sights that can be used in sniper attacks
against the security forces in Northern
Ireland, the Guardian has learned.
The theft of the long-range rifl es has
raised the spectre of a new lethal sniper
campaign similar to the one the South
Armagh Provisional IRA conducted that
resulted in the deaths of several soldiers
and policemen in the 1990s.
A security operation is still ongoing in
the Irish Republic to track down the weap-
ons, which can hit a target from over half a
mile away and are normally used to shoot
deer.
The British army’s last casualty in
Northern Ireland, Lance Bombardier
Stephen Restorick, died after being hit
by a high velocity bullet fi red from a snip-
er’s rifl e in 1997 near the border with the
Republic.
The Garda Siochána has confirmed
that their o
cers in County Wicklow are
investigating the theft of fi rearms during
a break-in at a gun dealer’s premises in
Ashford on 8 September.
The Guardian has learned that up to 30
rifl es with telescopic sights may have been
taken in a highly organised robbery at the
gun shop in the town. It is understood
A sign at a crossing in Co Armagh in
1999, before full IRA decommissioning
only two of the weapons taken have been
recovered so far.
Security sources in Northern Ireland
say the gang behind the break-in was
organised by a terror unit controlled by
the late Real IRA commander in Dublin,
Alan Ryan.
He was shot dead in the same month
following a dispute with armed non-
political criminals in the Irish capital.
They say the fact that almost all of the
weapons are still at large is causing a major
security headache on both sides of the
Irish border. The guns have been handed
over to a new self-styled IRA which is
an amalgam of the Real IRA, Republican
Action Against Drugs and various armed
dissident republican units in Tyrone,
Derry, Armagh and Antrim, the security
forces say.
In the Republic, Garda sources are
linking raids over the last fortnight in the
greater Dublin area to a desperate attempt
to recover the rifl es before they are smug-
gled across the border.
The two guns that have been recovered
Women over 50
hit by recession
They are often the generation holding the
whole family together.”
In research done last year, Labour used
parliamentary statistics to show that
women contributed £11bn of the £15bn
raised from changes to the tax and benefi ts
system by the government since 2010.
Cooper has raised concerns that the
introduction of universal credit, which
gives no allowance for a second earned
income, will act as a disincentive to
working mothers, while targeting the
main earner could lead to women who
traditionally collected child benefi t los-
ing control of the family budget. “Changes
are directed at the wallet rather than the
purse,” she said.
The changes to tax and benefi ts come
into force next April. The social care infor-
mation service will start in Salford, and the
party plans to extend it across Labour-run
authorities before the next election.
← continued from page 1
of the Tories by 22 points when it comes to
looking after the interests of women.
Overall, about 34% say Labour is best at
looking after the interests of women, com-
pared with 12% for the Conservatives. This
gap has widened from a six-point split on
the issue in February 2010.
In a speech today, Cooper aims to take
issue with the suggestion by Tory minister
David Willetts that the fi rst generation of
women to benefi t from changes in equality
laws were somehow selfi shly denying less
educated men a chance to work. “These
women are the very opposite of selfi sh.
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The Guardian | Saturday 29 September 2012
*
≥
News
‘I see how he manipulated my 15-year-old self’
Pupils who had an aff air with a teacher on the
lasting consequences
Saturday, pages 40-41
‘Pure elation’: families’ relief as runaway
schoolgirl and teacher found in France
“Bishop Bell school has a robust safe-
guarding policy in place, takes safeguard-
ing very seriously and the eff ectiveness
of its safeguarding procedures is rated
outstanding by Ofsted,” Boatwright said
this week.
The alarm was fi rst raised when Megan
failed to attend school last Friday and it
was discovered that she had travelled with
Forrest on a ferry from Dover to Calais the
previous evening. Forrest, an amateur
singer songwriter who performed under
the name Jeremy Ayre, wrote a blog post
Police stop pair in the
centre of Bordeaux
Forrest in custody ahead
of extradition hearing
Robert Booth
Kim Willsher
Paris
The 15-year-old schoolgirl Megan Stam-
mers and her 30-year-old married maths
teacher Jeremy Forrest were found “safe
and well” in central Bordeaux yesterday
lunchtime, apparently on their way to a job
interview, according to French police.
Their discovery ended an eight-day
international hunt involving Interpol
and brought huge relief to their families.
Megan’s stepfather, Martin Stammer,
spoke of “pure elation” at the news that
she had been found, while Forrest’s par-
ents, Jim and Julie Forrest, said the pair’s
fl ight had been “an ordeal for all the fami-
lies concerned”.
Stammers was last night in the care of
British consular staff and Sussex police
child protection officers in Bordeaux,
while Forrest was held in French custody
where he is expected to remain over the
weekend until a hearing on Tuesday to
authorise his extradition to the UK.
The schoolgirl and the teacher fl ed their
separate homes in East Sussex on Thurs-
day last week on a Dover to Calais ferry
shortly after it appeared the police may
have become aware of their potentially
illegal relationship.
They were stopped by French police at
12.15pm yesterday on Rue Sainte-Cath-
erine, the main high street in the centre
of Bordeaux. They were walking hand in
hand, one police source was reported as
saying. The prosecutor’s o
ce said they
had been found thanks to “an interest-
ing and credible witness” who contacted
them 48 hours earlier. The witness was
“not anyone close to the couple”, it said.
The couple’s disappearance had trig-
gered the issue of a European arrest
warrant for Forrest on suspicion of child
abduction. Members of both families
made emotional televised appeals urging
them to get in touch and return home.
Forrest’s black Ford Fiesta was reportedly
found 350 miles away in Paris.
Chief Inspector Jason Tingley of Sus-
sex police said there had been four pos-
sible sightings of the pair in France – two
in south-west France. On Thursday, there
was a third in Bordeaux by a member of the
public. Tingley said the sighting was con-
fi rmed and the pair were picked up in an
operation led by French police with assist-
ance from the UK’s Serious and Organised
Crime Agency and Sussex police.
On his return, Forrest, a keen amateur
musician from Ringmer, near Lewes, is
likely to face questioning about the nature
of his relationship with Stammers, who is
below the age of consent in the UK. Stam-
mers is not thought to have committed
any off ence.
Terry Boatwright, headmaster of
Bishop Bell Church of England school
where Stammers was a pupil and Forrest
taught maths, said everyone in the school
community was delighted that Megan had
been found and could now be reunited
with her family. “Clearly, much needs to
be done now to support Megan, and her
family, as they seek to return to some sort
of normality and we will do all we can to
play our part in that,” he said.
Martin Stammers last night appealed
for his family to be left in peace “so that we
can bond again as a family in private”.
Stammers’ natural father, Barry Wrat-
Martin Stammers,
who is Megan’s
stepfather, spoke
of his ‘pure elation’
that she had
been found safe
and well
Maths teacher
Jeremy Forrest
is expected to
remain in custody
until an expected
extradition hearing
on Tuesday
earlier this year entitled “You hit me just
like heroin …”. It was about “a bit of a
moral dilemma” he had had recently.
“The overriding question it left me with
was this: how do we, and how should we,
defi ne what is right or wrong, acceptable
or unacceptable??? I came to a few diff er-
ent conclusions, mainly that actually we
get a lot of things wrong, but at the end
of the day I was satisfi ed that if you can
look yourself in the mirror and know that,
under all the front, that you are a good per-
son, that should have faith in your own
judg ment.”
The pair were seen by CCTV aboard a ferry from Dover to Calais nine days ago
Photograph: Enterprise News and Pictures
ten, 41, said the discovery of his daughter
was “the news he had been hoping and
praying for”.
He said: “The past week has been abso-
lutely terrible. You don’t want to say it, but
sometimes you think the worst … I am
not angry with her at all – we all do silly
things when we are young without think-
ing about the consequences.”
School authorities are also likely to face
questions about their handling of the situ-
ation after it emerged the school and the
county council had been investigating
‘Clearly much needs
to be done now to
support Megan and
her family’
concerns about the relationship between
the 15-year old and her teacher when they
fl ed, and her family were not told. Pupils
said this week they had seen the pair hold-
ing hands on a fl ight from Los Angeles fol-
lowing a school trip in February.
The pair communicated on Twitter and
in late June, after Stammers tweeted: “I
just want to runaway forever,” Forrest
wrote: “Me & you. Let’s just run away.”
On 1 July, she wrote: “I just want to get
on a train / in a car and go somewhere with
you.”
There has been wider concern about
child protection measures at Bishop Bell
school after supply teacher Robert Healy
was jailed in 2009 for grooming and
having sex with two girls at the school.
Separately, Canon Gordon Rideout, who
chaired the school’s governing body until
2010, is due in court charged with 38 child
sex off ences over 11 years from 1962.
Anonymity law for teachers – from Monday
Teachers accused of committing crimi-
nal off ences involving children at their
school will be granted anonymity under
regulations which come into force next
week.
Under these restrictions Jeremy For-
rest and Megan Stammers might not
have been identifi able.
The provisions, introduced under
section 13 of the Education Act 2011,
mean teachers will become the fi rst
group to receive automatic anonym-
ity when accused of certain categories
of criminal off ences. Once a teacher
has been charged, he or she can be
identifi ed.
The anonymity relates to any com-
plaint made by, or on behalf of, a pupil
at the school at which the individual
teaches. Section 13 of the act imposes
reporting restrictions on “the publica-
tion of any information that would
identify a teacher who is the subject of
an allegation of misconduct that would
constitute a criminal off ence where the
alleged victim of the off ence is a regis-
tered pupil at the school.
The issuing of a European Arrest
Warrant, as happened in the case of Jer-
emy Forrest, is understood to amount
to launching proceedings and would
therefore automatically have lifted the
veil of anonymity in such a case.
Owen Bowcott
24 hours
24 hours
in pictures
The most
arresting
news
photography
from the
last 24 hours
guardian.
co.uk/
inpictures
4
*
The Guardian | Saturday 29 September 2012
Eurozone in crisis
‘Harshest French budget in 30 years’
•
Cuts minimised
as 75% supertax
is imposed
•
Right attacks
policy as ‘absurd
hyper-austerity’
However, it commits the government
to an austerity programme that will be
unpopular with leftwingers in the party,
at a time when unemployment is rising
and the economy teeters on the brink of
recession.
Before what they described as a “com-
bat” budget, Hollande and the prime
minister, Jean-Marc Ayrault, had stressed
their aim to reduce France’s public defi cit
to 3% of GDP by 2013, in line with its EU
ing cuts would be shared 50-50 from 2014,
the government said.
The standout measure, from a public
perspective, was a new 75% tax rate on
people earning more than €1m a year.
This is expected to hit only 2,000 taxpay-
ers. A new 45% income tax band is to be
introduced for those earning more than
€150,000 a year.
Business leaders, including L’Oréal
chief, Jean-Paul Agon, have criticised
the “supertax”, claiming it would pre-
vent France from attracting the cream of
executives and drive the wealthy into tax
exile.
France’s opposition UMP party reacted
to the budget with dismay. Former agri-
culture minister Bruno Le Maire said he
was worried and disappointed, adding:
“France is going to the wall.” He told
Europe 1 radio: “None of the solutions
announced will get the country back on
its feet, fight unemployment or create
jobs.”
Marine Le Pen, president of the far-right
Front National, described the budget as
“absurd hyper-austerity”. She said: “This
budget puts France on the same road as
Kim Willsher
Paris
Analysis
Pain, pain and
more pain will
not solve this
To the dismay of a swath of French bank-
ers, business leaders and the wealthy,
President François Hollande has remained
true to his word and announced €20bn
(£16bn) in new taxes, including a 75%
“supertax” band that will hit the rich.
In what Hollande has described as
France’s harshest budget in 30 years, busi-
ness and personal taxpayers were asked
yesterday to make an “unprecedented
eff ort” to slash the country’s public spend-
ing defi cit.
However, the Socialist government
sidestepped swingeing cuts in public
spending, including pensions and state
salaries, in its 2013 budget, which aims to
fi nd €36.9bn in savings.
It was also forced to concede it could
not keep its pledge to get the country out
of the red by 2017.
The budget was a delicate balancing
act in which Hollande sought to reassure
investors and the fi nancial markets, while
simultaneously raising taxes on large busi-
nesses and high-earners.
36.9
The amount in bil-
lions of euros that
the budget aims
to fi nd in savings,
including more
than €10bn in pub-
lic spending cuts
Larry Elliott
A
usterity mania is
sweeping Europe.
François Hol-
lande’s socialist gov-
ernment in France
became the
latest to tighten its belt, an-
nouncing €37bn (£29.5bn)
of spending cuts and tax
increases yesterday . This
mania is
g Europe.
Hol-
ocialist gov-
in France
he
lt, an-
5bn)
ax
his
commitments. The defi cit is around 4.5%
of GDP for this year.
The budget aims to raise two-thirds of
the £36.9bn savings with extra taxes split
evenly between households and large
companies, plus more than €10bn in pub-
lic spending cuts.
The burden between taxes and spend-
Portugal
People at breaking point
as slump wipes out the
savings of austerity
embarrassing U-turn over social security
reform – one of the few times a govern-
ment tied into austerity as part of a
bailout programme has responded so
decisively to popular revolt.
Today , demonstrators will gather
again to march against the spending
cuts they believe have pushed their
country deeper into recession. Mean-
while, workers have downed tools in
protest over changes to working regula-
tions. At Lisbon’s usually busy port this
week, the cranes were still, the contain-
ers stacked high and the lorries parked
up as dock workers staged one of a
series of strikes.
Pedro Marques, a politician in the
opposition Socialist party, sits on the
cross-party budget committee and
works with the “troika” – the European
Central Bank, the EU and the Inter-
national Monetary Fund – that bailed
out Portugal on condition that it fol-
low a strict programme of budgetary
discipline. He wonders how they will
respond to the protests in the country
previously held up as a poster child for
austerity.
“We had that huge demonstration
but a week after you had the demon-
stration in Spain where everyone was
arrested. I don’t know what impresses
the troika more, what is more a sense of
despair. We are calm, we abide by the
law, but 1 million people in the streets,
it is 10% of our population. If they don’t
see this is a country rising against this
approach, what kind of message do we
have to give?”
The number of protesters is disputed
but the message from Portugal could
not be clearer. The rightwing coalition
imposed austerity with almost religious
zeal. It cut wages, raised taxes, priva-
tised state-owned companies and over-
hauled labour laws. But still the defi cit
stays stubbornly high, while the country
has sunk into the worst depression since
the 1970s.
Many of the measures simply back-
fi red. In January, for example, the gov-
ernment raised VAT in restaurants from
13% to 23%, hitting sales and therefore
tax revenues almost immediately. Res-
taurant owners can now be seen staring
mournfully out of empty dining rooms
as potential customers hurry past.
Local manufacturers also suff ered.
Portuguese companies sell almost 70%
of their goods to domestic consum-
ers, many of whom no longer have the
money for non-essential items. As com-
panies went bust or sales slumped, so
did the government’s tax receipts.
The rise in unemployment has been
the most shocking. O
cial fi gures put
the jobless rate at 15.7% but that only
accounts for those registered with
jobcentres.
Portugal’s largest union, the CGTP,
says many have given up looking for
Stinging cuts and tax hikes have
not lifted Portugal out of recession
– and anger is building. Josephine
Moulds reports from Lisbon
‘W
e have
reached the
limit. People
are tired of
making sacri-
fi ces because
you don’t see
any improve-
ment whatsoever. Quite the opposite.”
Marina Padeiro, 36, is one of Portugal’s
estimated 1.3 million unemployed – a
number that has shot up in the past year
and a half as a result of the stinging aus-
terity measures imposed on the country
in exchange for a €78bn (£62bn) bailout.
Sitting in a cafe in the northern indus-
trial belt of Lisbon, she shrugs. “If there
was some sort of hope you might see a
decent future … The problem is, they
are not showing it to us.” Her father, a
retired lorry driver, says the evidence
is on the streets. Out here – far from the
capital’s pretty, cobbled centre, which
still attracts tourists – shops are closed
for good, or open only sporadically.
Padeiro has been out of work for three
years. In 2009, the insurance company
she worked for said it would not renew
her contract “because of the crisis”, one
month before she gave birth to her sec-
ond child. “It was like taking the carpet
from under my feet.” The family now
get by on €600 a month, their diet sup-
plemented by carrots, onions and fruit
from her father’s allotment.
She is not the only one to have
reached her limit. Two weeks ago,
hundreds of thousands marched in the
streets of Lisbon and other cities, in
the biggest protest since the end of the
dictatorship in 1974. The demonstra-
tion forced the prime minister into an
1.3m
work and the real jobless rate is over
20%, or 1.3 million. That puts a further
strain on the public fi nances, as those
who have never been on benefi ts before
become reliant on the state. As a result,
many of the savings made through
austerity have been wiped out. What’s
more, Portugal is far from growing its
way out of the defi cit, with the economy
expected to shrink by 3% this year.
Marques says: “It’s so clear now. In
the case of Greece they said that they
were not fulfi lling their responsibilities.
In Portugal they say that we are fulfi lling
them, but the recession is here any-
way.” His Socialist party signed up to
the troika agreement but says it would
implement it less harshly and would
promote growth at the same time.
Even outside the mainstream politi-
cal parties, few are calling for Portugal
to default on its debts and drop out of
the euro. Over at the o
ces of the CGTP,
there is a buzz ahead of the demonstra-
tion. The phones are down and email
is not working. “This always happens
before a big protest,” says one member
conspiratorially.
Augusto Praça, international secre-
tary of the union, explains their posi-
tion. “If you put the question to leave or
not to leave the euro, you don’t resolve
the problem.”
He says it is a false choice facing the
Portuguese, the equivalent of asking
someone if they want to die this way
or that way. “You say: no, I don’t want
either. In this crisis, I think there is
another way that they are not putting on
the table.”
The CGTP has proposed a package
of measures to increase taxes on capi-
people out of work, according to the
largest union, CGTP. It says the o cial
rate of 15.7% is an underestimate
3%
‘If there was some sort of
hope for the future …
The trouble is, they are
not showing it to us’
Marina Padeiro, above
Expected shrinkage of the Portuguese
economy in the next 12 months
23%
The VAT rate in restaurants, raised
from 13% in February
5
The Guardian | Saturday 29 September 2012
*
≥
The live blog
News as it happens, plus instant analysis
guardian.co.uk/business
hits big business and the rich
Greece, Ireland, Portugal and Spain.”
François Rebsamen, president of the
Socialist party group in the senate – the
upper house of parliament – said the
budget was “constructive”. He said: “The
battle to put our country back on its feet,
for employment, for the return of growth
and spending power, has started and the
2013 budget, which is fair, rigorous and
constructive, will be a decisive factor in
winning it.
“Eff orts have been asked of the wealth-
iest while the middle and working classes
are spared. The tax burden on companies
has been rebalanced in favour of small
and medium enterprises, and therefore
in favour of competitiveness.”
Ayrault promised on television on
Thursday that the budget defi cit target
of 3% – a pillar of Hollande’s presidential
campaign this year – would be met. He
insisted France had to avoid the escalating
borrowing costs that have torpedoed the
economies of other eurozone countries.
“If we abandon this goal, then straight
away the rates will rise and we will fi nd
ourselves in the same situation as Italy
and Spain. I do not want that,” he said.
“We cannot continue with the debt and
the defi cits we have now.”
The government fears any sign it is not
addressing its infl ated defi cit might see
the fi nancial markets turn on France, the
eurozone’s second biggest economy.
However, Ayrault admitted France
would not balance its books by 2017, when
Hollande’s term in o
ce ends, but would
have a public deficit of around 0.3% of
GDP. He also confi rmed he was expecting
growth of 0.8% for 2013, which econo-
mists say is too optimistic. He said the fi g-
ure was “realistic” and “attainable”. The
government is then expecting 2% growth
every year between 2014 and 2017.
Just four months into his five-year
term, Hollande is under fi re from all sides.
As well as the grumbling from business
leaders, unemployment that topped 3
million in August, and tumbling popu-
larity in the polls, the president is facing
revolt from traditional allies in the unions
and leftwing groups that are threatening
strikes if the budget is too austere.
A demonstration is planned tomor-
row against the EU budget treaty, which
imposes strict defi cit limits.
follows Spain’s decision to take around
€40bn out of its budget with the aim of
hitting defi cit reduction targets agreed
with Brussels.
Meanwhile negotiations continue
in Athens between Greece and the
so-called troika (the International
Monetary Fund, the European Central
Bank and the European Union) over a
fresh package of spending cuts and tax
increases now estimated at €13.5bn.
All this is happening at a time when
the eurozone economy is already going
backwards. France announced zero
growth in the second quarter – extend-
ing its period of stagnation to nine
months. Spain’s central bank warned
earlier this week that the economy was
contracting sharply, while Greece is in
the midst of a 1930s-style depression.
The austerity programmes come with
pledges of economic reforms. Put sim-
ply, the idea is that too many eurozone
countries have been feather-bedded
for too long and now need a chill blast
of reality to wake them up. Budget
retrenchment will ensure that countries
live within their means while deregula-
tion, privatisation and more fl exible
labour markets will make them leaner
and fi tter. Before too long a revitalised
Europe will be punching above its
weight in the global economy.
All of which is total moonshine.
Not one of the objectives set by Hol-
lande, Mariano Rajoy in Spain or Antonis
Samaras in Greece is likely to be met.
The fi rst goal is that budget defi cits will
come down rapidly as a result of auster-
ity. All the evidence so far is that targets
will be missed because demand will
be sucked out of already pitifully weak
economies, with the eff ects magnifi ed
because so many countries are acting in
the same way simultaneously.
A second fallacy is that the fi nancial
markets will be impressed by this self-
fl agellation. In the short-term that may
be the case, but once the rotten eco-
nomic data – for growth, unemployment
and the public fi nances – starts to roll in,
investors will take fright at the combina-
tion of bombed-out economies and ris-
ing debt-to-GDP ratios.
Finally, there is the misguided
notion that voters will stoically accept
all this pain, seeing it as a price worth
paying for the restoration of national
solvency and to ensure the future of
the eurozone. In the fantasy world
inhabited by European policymakers,
the future is brighter, richer, more
harmonious.
The general strike in Greece, the
demonstrations in Madrid, the pres-
sure for autonomy in Catalonia and the
likely negative reaction in France to
Hollande’s budget, paint a rather diff er-
ent picture.
In the real world the insistence on
pain, pain and yet more pain means
permanent recession, toppled govern-
ments and growing hostility to the
European Union. If it eventually leads
to the breakup of the single currency
because voters decide they have had
enough, those running the show (sic)
will have only themselves to blame.
Spain
Boomtime buildings leave banks with bill
Bankia, Spains’s fourth-largest lender,
topped the list with a hole in its capital
needs estimated at €24.7bn. Catalunya-
bank will need another €10.8bn. In all
cases, the hole represented the amount
of extra capital the bank would need to
survive a signifi cant further turndown in
Spain’s recession-plagued economy.
Bankia, created by the merger of half
a dozen ailing savings banks, is one of
several that also sold their own clients
complex hybrid preference shares which
will now see hundreds of thousands of
ordinary Spanish retail investors forced
to lose money.
Eurozone authorities have made it clear
they will not fi ll the entire €59bn hole with
bailout money, and that part of it must be
covered by infl icting losses on the prefer-
ence shareholders.
That will enrage the small investors,
many of whom complain they were sold
the shares without understanding what
they were by insistent bank managers who
cold-called them and claimed that they
were as secure as ordinary deposits.
Some put their life’s savings into pref-
erence shares – and courts are dealing
with thousands of cases where banks are
accused of conning them into buying the
shares. Central bank deputy governor
Fernando Restoy said the losses for share-
holders would be decided bank by bank.
On Friday an investigating magistrate
in Madrid, Javier Gómez Bermúdez,
ordered Spain’s central bank to hand over
information on the behaviour of senior
executives of another collapsed savings
bank – the Caja de Ahorros del Mediterra-
neo (CAM), which has since been cleaned
up and sold on.
Judge Bermudez wants the bank to
say whether senior managers were hon-
est about the amount of toxic real estate
they had taken on as well as information
on the way their pay was set. He also wants
to know whether auditors should have
spotted the problems before the bank
collapsed.
The Oliver Wyman report cleared most
of the country’s biggest banks, saying that
Santander, BBVA, Caixabank, Sabadell and
three others would not need any help.
The fi gure of €59bn sets the upper limit
of the money the banks would need from
the rescue fund. Two mergers between the
banks aff ected should lower that to €54bn,
with €44bn corresponding to banks that
have already been nationalised.
Giles Tremlett
Madrid
A wave of protests
A woman holds a banner that reads
‘Enough! Now is our turn’ during
a protest in front of the Belem Palace
in Lisbon last week
Photograph: Patricia De Melo
Moreira/AFP/Getty Images
Spain’s banks must fi ll a €59bn (£47bn)
hole in their capital cushions caused by
a burst of reckless lending to building
developers during the country’s boom
years that has left them awash with toxic
real estate assets.
The Spanish government and central
bank yesterday revealed the results of
an independent report commissioned to
work out just how bad the damage is and
to identify those banks that will need to be
bailed out with eurozone rescue funds.
The report, based on stress tests carried
out by consultancy Oliver Wyman, lists
seven banks that will certainly need bail-
out money or must raise further capital
themselves by the middle of next year.
Spain’s secretary of state for the
economy, Fernando Jiménez Latorre,
estimated that, over all, Spain’s banks
would eventually need some €40bn of
the €100bn of bailout money on off er to
them to cover the bad loans – adding that
this marked the beginning of the end of
the country’s banking crisis.
“With this process capitalisation and
restructuring needs will all be met,” he
said. “All doubts should be dispelled.”
But markets remained nervous yester-
day amid rumours that Spain’s debt rat-
ing could be downgraded to junk status
after the market closed. France’s stock
market index fell 1.5% while the German
stock market was off 0.7% while US was
0.8% lower. Stocks in London edged 0.3%
lower.
€
59
bn
Hole in the capital
cushion of Spain’s
banks. Eurozone
authorities say
they will not fi ll
the whole gap with
bailout money
Analysis
How Spain’s social fabric is being torn apart
W
hen Lisha Yan, a
young, London-
based media execu-
tive, left her busi-
ness dinner at the
roof top restaurant
of Madrid’s elegant Palacio de Cibeles
on Wednesday night, she expected
to enjoy walking through the elegant
streets of a sophisticated European
capital at night.
Instead Yan, 26, was hit by a rubber
bullet. “We were walking to our taxis
and all of a sudden people were run-
ning towards us and these big vans
appeared,” she said, still indignant two
days later. “We heard loud shots. Then I
felt something hit my knee.”
Armed riot police rushed by, shout-
ing at the shocked group of Asian exec-
utives she was with. “The police didn’t
care who they shot at,” she said by
phone from her wheelchair as she fl ew
home with bad bruising on Thursday.
“How can that happen?”
Riot police had been chasing dem-
onstrators, some of them violent, who
have protested outside the parliament
buildings for the several days this
week. The response has often been
heavy-handed and indiscriminate.
As Spanish unemployment hits 25%
and keeps rising, parts of the country’s
fabric are beginning to tear. Half a mil-
lion homes have no breadwinner. More
than half of under-25s and half of immi-
grants are jobless. And with one-third
not qualifying for unemployment ben-
efi t, desperation is setting in.
One alarming tendency is the removal
of old people from care homes, with
families either unable to pay or simply
desperate to have the stable, if meagre,
income provided by a pension back in
the household. Some 8,000-10,000 of
the 240,000 people in private residen-
tial homes have returned to their fami-
lies this year alone, according to the FED
association of private care homes, which
account for about 75% of private beds.
Almost all welfare sectors can tell
similar stories. Hospital wards are being
closed in Catalonia. Some of Madrid’s
state secondary schools have closed
their science laboratories.
The Roman Catholic church’s Caritas
charity, which hands out food packages
and other help, says it now looks after
one million people, or one in 50 Span-
iards. “People need us for longer and
longer and our resources are stretched
to breaking point,” said Caritas boss
Sebastian Mora.
In some neighbourhoods of Madrid,
nervous men now scuttle from bin to
bin at night looking for food. And as
Spain becomes poorer, squabbling over
increasingly scarce resources becomes
ever more bitter.
In relatively wealthy Catalonia, age-
old tensions are being revealed again.
As Catalans become increasingly con-
vinced that they pay too much to poorer
regions while seeing cuts applied at
home, a surge in separatist sentiment is
driving the region into a head-on colli-
sion with central government.
Cuts are tearing through Spain’s cul-
tural fabric, too. Public museums such
as Madrid’s El Prado gallery have had
budgets slashed by two-thirds in just
four years.
As this week’s protests and moves
towards Catalan secession have shown,
Spain’s social and political fabric cannot
cope with much more pain.
Giles Tremlett and Martin Roberts
tal, rather than employees. One of its
suggestions is a fi nancial transaction
tax of 0.25%, which it says would raise
€2.38bn a year.
Praça seems to epitomise the Portu-
guese reserve. Although apparently a
fi rebrand union leader, he is softly spo-
ken, with a calm, determined manner.
The only time he shows a fl ash of anger
is when asked if he feels sorry for the
prime minister, Pedro Passos Coelho.
“He is a liar,” he retorts. “He promised
many things he didn’t do. He wouldn’t
raise taxes, wouldn’t change salaries,
wouldn’t create any VAT increases.
Nobody believes him today.”
For the time being, it seems that Pas-
sos Coelho has averted a political crisis
by ceding to the demands of the last
protest. The demonstration was trig-
gered by a badly thought-out, badly
communicated policy, which met with
almost universal opposition. Passos
Coelho had proposed to raise employ-
ees’ social security contributions from
11% to 18% of salaries while cutting the
same tax for companies by almost 6%.
The idea was to cut employers’ costs
and make them more competitive. But it
was a gift to the unions, which immedi-
ately claimed the government was “rob-
bing workers to pay their bosses”.
The question now is whether that
protest marked a line in the sand;
whether this is the point where the
mild-mannered Portuguese say enough
is enough. Back in Vialonga, Marina
Padeiro’s father thinks if it has not
arrived already, that moment is close.
“The thread is pulled very taut at the
moment,” he says. “It may break very
easily – and very quickly.”
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